Exporters keeping an eye on looming Trade War

Logs ready for export from Napier Port. Photo / File

With a leading New Zealand economist marking the looming trade war between China and the United States as a potential risk to regional economies, Hawke's Bay apple exporters are watching out for potential blow-back.

In a recently-published regional economic forecast from KiwiBank, its chief economist Jarrod Kerr pointed to "foreign and ugly" influences as being the major future threat to the regional economy.

"The rising risk of a trade war, between economic giants, will hurt global confidence and growth."

Kerr said while the risk of a "full-blown" trade war was unlikely, at this stage, the potential for something "far worse" needed to be considered.

"Our largest trading partner China is involved in the scuffle and our second largest trading partner Australia, is more leveraged to China than we are. So, in a downturn, we could get hit directly and indirectly."

The Hastings-based organisation NZ Apples and Pears, which represents the pipfruit industry, is already keeping an eye on the situation.

"I think that the biggest risk that we face is where the USA might, in the face of the introduction of tariffs in China, redirect its product to another of our strategically important markets thereby altering the trade balance in that market," chief executive Alan Pollard said.

"I guess there is also the risk that China may expand its tariffs beyond the USA, or that they may be stricter with products entering the country.

"We are keeping in touch with MFAT and MPI who are monitoring the situation."

However, the region's log exports - the majority of which are shipped from Napier Port to China - should remain unaffected.

Napier Port chief executive Todd Dawson said the port was confident that log exports would continue to rise over the next decade, with forests across the region ready for harvest, adding there was "no shortage of demand" across global markets.

"We're deeply connected with our customers and invested in understanding their businesses, their supply chains, and what drives fluctuations in trade.

"While there has been growing tensions between the US and China the threat of tariffs has to date shown no impact to New Zealand log export growth.

"Logs exported from Napier are primarily bound for Chinese, Indian and South Korean markets, where they're used in the construction industry and the like. China, our biggest market, is in the midst of a building boom that hasn't shown any signs of slowing.

"It would take a major downturn in the Chinese economy to affect log export volumes in New Zealand."